The leading advertising agencies will be the ones who stay on top of these changes and find ways to leverage them through innovative approaches, thus maintaining their value. Agencies have to focus on great concepts that can be leveraged in multiple Medias, often playing off other.

Those that hold on to old ways and rely on media buying and production fees for profits will get squeezed out of existence. I think the very large agency model will fall apart over the next 5 years. Instead, you will see a rise of “networks.” This will be a group of complementary companies that come together for campaigns.

There will be a lead creative and strategic shop that will act as architect, then a group of specialists shops each executing a specific component. They may even fall under the same ownership umbrella but will have to be somewhat autonomous companies. This is already happening and will continue to do so for a while.

So you’ll see more and more specialty shops popping up and getting a buzz and the larger established global agencies losing talent and struggling to adapt. Then 5-10 years later when all the new rules of advertising have become more predictable, you’ll see a series of acquisition and consolidation. All these changes are due to the disruptive innovations that have come about in the Internet Era. Anyway, that’s what my crystal ball says.